Source: Diplomatist
Six countries—including five Asian economic powers—became non-Arctic country observers to the Arctic Council in May 2013. The addition of China, India, Italy, Japan, Singapore, and South Korea is the latest evidence of the global power shift toward Asia since the economic crisis in 2008, which is being felt most acutely in Europe. For the first time, Asian countries joined this once exclusive club that includes Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States and six other European non-Arctic country observers.
If looked at more carefully, all five Asian economies have two common labels: energy importer and big trader. So their motivations for joining the Arctic Council are naturally questioned. This is especially true for China and India whose continuous economic growth together with Middle East will account for a large increase in global energy demand over the next two decades[1] and some also feel that this is just their latest attempt to expand their national power into the governance of a critical international territory.But regardless of the motivations, the Arctic is a critical global commons that needs to be protected and preserved. The Arctic Council will play an important role in ensuring that all countries don’t seek short-term self-interests, but work together for the greater good. Asian powers—especially China and India—need to help on that mandate.
Reasons to Join the Arctic Council
There are several reasons for why emerging economies like China and India should be involved in the governance the Arctic.
On the one hand, as a global common, the sustainability of the Arctic lies in the national interests of all countries in the world, including China and India. On the other hand, as the world’s first and third largest carbon emitter, China and India are partially responsible for the imminent challenges the Arctic area faces with climate change melting the ice—and no where are the impacts of a warming planet more severe. This means that China, India, and the other Asian economies are important stakeholders and should be encouraged to work together with the eight member states of the Arctic Council to ensure a sustainable future.
This is not, however, the first time they have been active in the region. In 1997, China did its first National Arctic Research Expedition, going back four times since then and building a permanent Chinese Arctic station. India also started expeditions in 2007, while Japan was the Asian pioneer of the Arctic research.
The scientific research will continue to help these countries better understand how climate change is impacting the Arctic and the implications to themselves, given that they are all vulnerable to extreme weather, hurricanes, and other adverse impacts. Research in these topics will therefore be the first area where these new observer countries can make contributions.
Exaggerated Desires for Fossil Fuels and Shipping Lanes
But this surely does not end the suspicion that these new Asian members have some hidden agenda for the vast of oil and gas reserves in the Arctic area.
The undiscovered reserves in the Arctic are estimated by the U.S. Geological Survey to possibly contain 13 percent of the world’s undiscovered oil (90 billion barrels of oil) and 30 percent of its undiscovered gas (1,670 trillion cubic feet). And national oil companies of the Arctic Council’s member states and multinational oil giants are already gearing up to drill in the Arctic.
Given the increasing dependency on oil imports in China—imports rose from 30 percent of consumption in 2000 to 56 percent in 2012 and may account for over 80 percent by 2035 if trends continue—it seems reasonable for Beijing to want oil from the Arctic.
Natural gas is yet another motivating factor. China only started importing natural gas in 2006, but imports already account for more than 30 percent of consumption in 2012. With more Chinese cities facing public pressure to improve air quality, demand for natural gas is set to expand in the future.
The other Asian members are even worse in terms of their dependency on energy imports, making the observers of the Arctic Council a group of countries looking for new sources of energy. And the European observers are similar too.
But is Arctic oil and gas a good option to quench these countries’ thirst for energy?
Despite the large reserves, Arctic oil will not come cheap. The unfriendly climate in the Arctic area means that drilling would be more expensive and susceptible to being delayed by disruptive weather. It is also difficult to scale up. Therefore, Arctic oil requires a high global oil price to make it economically desirable and is unlikely to be an important supplier in the near term.
The technology required to drill in polar areas is also a deterring factor. Royal Dutch Shell recently decided to postpone oil drilling off the coast of Alaska due to equipment accidents. The cold weather and storms in the area imposed great challenges to the existing technology and equipment.
The Mexican Gulf oil spill further revealed the high risk of deep sea drilling and the inability of one of the world’s leading oil companies to handle this situation even in one of the most advanced countries and in a mild climate. Even much smaller accidents in the Arctic area would be unimaginable disasters, and could destroy the whole Arctic ecosystem that is already struggling with climate change.
While Arctic oil and gas may be the last untapped reserves, they don’t need to be the last resort to ease the world’s addiction. The Stone Age didn’t end because stone ran out and there is no reason countries should use all the oil and gas under the ground, wherever they are.
All of this reinforces the point that protecting the environment and biodiversity is the first priority for the Arctic Council. And one of the first two agreements the Arctic Council signed was the legally binding Agreement on Cooperation on Marine Oil Pollution Preparedness and Response.
The Arctic is also not the only untapped area for new sources of fuel. The success in extracting shale gas in the United States and the unconventional oil found in other countries have made oil supply less of a concern in the future energy market. The liquefied natural gas market will likely to see oversupply in the coming years due to the abundance of shale gas in North America, making gas from the Arctic less attractive. And compared to drilling in the Arctic, the environmental concerns even in these widely criticized operations seem less worrying.
So despite the recent big oil deal between China and Russia, the Arctic oil is still far away from being an important source in China’s 5 million barrels imported per day. Obviously it is of strategic importance for China to diversify its oil imports especially after a few setbacks in Middle East and African countries, but in the medium- and long-term China really needs to start preparing to transition to renewable energy sources. The same holds true for India. And this means that China needs to take more precaution when it explores the potential joint exploration with either Russia or Norway in the Arctic area, as this may invite criticism from international green groups and local communities.
The shipping lanes that will potentially open as the Arctic ice melts is another feared motivation for these Asian countries getting involved in the region, as these global traders will benefit from shipping routes that reduce the distances to Europe and America.
However, this too is quite questionable. India is out of the equation as it will not be able to save any time or distance by taking the Arctic route to Europe or America. Chinese harbors to the south of Shanghai are also less served by Arctic routes. And even the distance saved from northern China is not much if the destination is to the south of England in Europe or some ports beyond the United States.
The cost of traveling the Arctic route will also be much higher than normal shipping lanes due to the severe weather conditions. But even though the ice-free route is still decades away and only seasonally accessible, cargo companies are already preparing for the new waterway.
In the end, however, opening up shipping lanes around or through the Arctic would be the most unfortunate scenario for the Arctic Council, whose original purpose when it was established in 1996 was to promote sustainable development and environmental protection in the region.
Not only will the ships further accelerate the melting of the ice, but the black carbon emitted will also darken the ice, reducing its ability to reflect sunshine and accelerate melting. The rise in sea levels will threaten coastal cities like Shanghai and Mumbai. And the accelerated melting could worsen the impacts of climate change by releasing methane from the Siberian permafrost, potentially doubling the greenhouse gas concentration in the air in the worst scenario and setting off a runaway chain of events that threaten the whole human civilization.
But even in the best-case scenarios, the disruption that the local communities would experience—from fishing activities to hunting—would be enormous. And there would also be a significant threat to the fragile biodiversity in the Arctic from the invasion of alien species that come along with the cargo ships.
Ensuring a Sustainable Arctic
The Arctic is rising to the top of many governments’ agendas, but the complexity and delicacy of governing one of the most vulnerable areas on this planet may not be properly understood.
The Arctic Council provides a platform for collaborative and joint efforts, not only for the member states and the observer countries, but also for local communities, non-governmental organizations, and other nations, to participate in inclusive governance of a global commons with huge value.
Together with other international organizations including the United Nations, countries must ensure that the Arctic is not being treated as a “first come, first serve” virgin land with vast natural reserves, but as a place where effective and just global governance can balance the needs to respect sovereignty, protect cultural and economic interests, and maintain international security.
And for that reason, every country in the world, including China and India, should strive to play their part in protecting this critical region.
This article was originally published in the Diplomatist
Notes
[1] IEA (2012), World Energy Outlook 2012.